Freedom Line Blog

With the Senate Finance Committee set to vote tomorrow on Senator Max Buacus’ $839 billion “health care reform” bill, the health insurance industry is out with a new study warning that the legislation will dramatically increase health insurance premiums for U.S. families.  

The study, commissioned by America’s Health Insurance Plans (“AHIP”) and prepared by PricewaterhouseCoopers, “makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system,”  said AHIP President and CEO Karen Ignagni. “Between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system.”

Those provisions in the Baucus bill analyzed by the study include:

• Insurance market reforms coupled with a weak coverage requirement,
• A new tax on high-cost health care plans,
• Cost-shifting as a result of cuts to Medicare, and
• New taxes on several health care sectors.

The White House and Congressional proponents of “reform” immediately responded with a typical “shoot-the-messenger” reaction.   They have yet to substantively dispute the study’s actual findings.

President Obama loves the Mayo Clinic.  President Obama loves Medicare.  But the Mayo Clinic doesn’t love Medicare.

The Arizona Republic reported on Friday that,

One of the Mayo Clinic’s two family-medicine practices in Arizona soon will stop accepting Medicare, leaving thousands of patients to pay out of pocket for routine doctor’s visits or find a new physician. … Hospital officials called the new policy a ‘two year pilot program’ and said Thursday that the changes are necessary because of low Medicare reimbursement rates.”

Does anyone recall that one of the provisions of “health care reform” is to reduce Medicare reimbursements to doctors even further?  Medical insurance that doctors won’t take just doesn’t seem like a healthy reform.

“But those political promises were only good for as long as it took to get the mandate enacted into law.”

That was the observation of “neither politically or socially conservative” author and Massachusetts resident Wendy Williams, commenting this weekend upon her first-hand experience under that state’s mandatory healthcare “reform.” Readers should be forewarned – Mrs. Williams’s commentary generates visceral anger at the sanctimonious bureaucrats who would wrench control over our own health and family budget decisions.  She describes how she and her husband rationally chose to purchase insurance through IBM, his former employer, only to be informed three years later that they’d be fined by the state because Massachusetts changed the rules to make their bare-bones catastrophic policy unpalatable.  Accordingly, they were told to either purchase a pricier policy that they didn’t want, or pay another $1,000 each year to Massachusetts. 

This directly contradicted the explicit promises of then-Governor Mitt Romney and then-Senator Ted Kennedy that middle-class residents would not find themselves taxed or otherwise penalized if state government healthcare reform was imposed.

Now, advocates of a federal healthcare mandate make the same promises to us.  As they say about those who fail to learn from history…

“Health Care Bill Gets Green Light in Cost Analysis”

That is the gift proponents of government-run health care received this morning in the form of a New York Times headline.  That headline, however, along with its accompanying story about the Congressional Budget Office’s preliminary cost analysis of the Baucus bill, is about as deceptive as the ObamaCare sales job Washington politicians have been employing for months.

CBO’s preliminary cost analysis is just that – a preliminary estimate based on a theoretical framework of ideas approved by the Senate Finance Committee.  It’s preliminary because the actual bill hasn’t been written yet, much less been combined with at least five other, more expensive versions of “reform” circulating in the House and Senate.  As Chris Frates of Politico.com noted yesterday:

While the media and lawmakers often shorthand a CBO letter as a ‘score’ or ‘cost estimate,’ today’s CBO letter is neither. Because the bill is still in ‘conceptual,’ or layman’s terms, CBO’s letter today was a ‘preliminary analysis.’  For it to be an official cost estimate, the bill has to be translated into legislative language.

“And CBO goes to great pains in its letter to make the distinction:

“‘CBO and JCT’s analysis is preliminary in large part because the Chairman’s mark, as amended, has not yet been embodied in legislative language,’ the letter says.”

In other words, is anyone prepared to believe that the most recent CBO cost estimate will even come close to resembling reality once the Baucus bill is combined with the budget-busting provisions of the various other versions of ObamaCare?  After Reid and Pelosi are through with their parliamentary tricks outlined here and here?

Yet liberals and the mainstream media today are giddy with excitement.  Why?  Because regardless of the fact that the CBO letter means nothing in the grand scheme of things, something at which the CBO itself hints, for the first time in this debate they have something – anything – that supports their dream of government-run health care.   Reality be damned. 

Our guess is that the large majority of Americans are still not ready to join their party.  Even taken at face value, CBO’s preliminary claim that the Baucus bill will actually reduce the budget deficit by $81 billion over 10 years simply means that the legislation raises taxes on businesses and individuals and cuts benefits only slightly more than it increases spending, while still leaving 25 million people uninsured.  And the more expensive the final bill gets – don’t believe for a moment that it won’t get more expensive – the greater the tax increases and benefit cuts will become in order to square with the President’s pledge to not sign a bill that adds “one dime” to the deficit.

Isn’t “change” grand?

A column in the Kansas City Star reports that former Senate Majority Leader and presidential candidate Bob Dole is urging Republican members of Congress to vote for President Obama’s healthcare reform plan. The piece quotes Dole as saying “I want this to pass. I don’t agree with everything Obama is presenting, but we’ve got to do something.”

The last five words of that sentence should be anathema to any red-blooded conservative. Is there any other serious situation in life where you could justifiably invoke a similar rationale? Is that the sort of thing you’d like to hear your surgeon say?

How about “doing something” effective? How about “doing something” that solves rather than compounds a problem? Caring about actions makes you a politician. But caring about outcomes makes you a statesmen. That puts Bob Dole’s record at 1-1.

CFIF has written about and commented on the crushing blow that forced expansion of Medicaid, as called for in the health care reform bills making their way through Congress, will have on state budgets.

But don’t take our word for it.  Here is what Democrat Governors are saying about the issue, as compiled by the Senate Republican Communications Center:

Dem Health Care Angst Beyond The Beltway

Democrat Governors Say Their States Can’t Shoulder Burden Of New Democrat Health Care Mandates

GOV. TED STRICKLAND (D-OH): “The States, With Our Financial Challenges Right Now, Are Not In A Position To Accept Additional Medicaid Responsibilities.” “Still, Strickland warned on a recent visit to Washington that ‘the states, with our financial challenges right now, are not in a position to accept additional Medicaid responsibilities.’ Strickland said that he wants ‘a health-care package that is inclusive and provides for all citizens,’ but he added that if Medicaid is expanded, he hopes to ‘see the federal government assume the greater portion of the costs, if not the total costs.’” (“Expansion Of Medicaid Could Impose Costs On Ohio,” Columbus Dispatch, 10/7/09)

GOV. JOHN LYNCH (D-NH): Did Not Sign A Letter Supporting Health Care Reform Because It Failed To “Address Concerns Regarding Potential Cost Shifting To The States.” “Last week, Democratic governors sent a letter to congressional leaders proclaiming that ‘the status quo is no longer an option’ and urging passage of a healthcare bill this year. Six Democratic governors did not sign the letter for various reasons. In the case of New Hampshire Gov. John Lynch, he did not sign because the letter failed to ‘address concerns regarding potential cost shifting to the states,’ said Colin Manning, a spokesman for the governor. ‘And this concern has been shared by a number of governors that Gov. Lynch has spoken to across the country,’ Manning said.” (“Obama Finds Support Outside Party And Washington For Healthcare Plan,” Los Angeles Times, 10/7/09)

GOV. PHIL BREDESEN (D-TN): “My Guess Is That Most Other States Would Face A Similarly Painful Situation If These Costs Are Passed Down.” “In his letter to Sen. Bob Corker (R-Tenn.), Bredesen also urged the senator and his fellow lawmakers to temper down their proposed changes to the low-income healthcare entitlement — an expansion Corker later described as an ‘unfunded mandate’ that could overburden states at a time when many are struggling to manage the recession. ‘My guess is that most other states would face a similarly painful situation if these costs are passed down,’ Corker explained in his own statement on Tuesday.” (“Tenn. Gov Bredesen: Medicaid Expansion Could Cost State Millions,” The Hill’s “Briefing Room” Blog, 10/6/09)

Govs. Mike Beebe (D-AR), Jay Nixon (D-MO), Bev Perdue (D-NC), John Lynch (D-NH) And Dave Freudenthal (D-WY) Held Out From Signing A Letter On Health Care Reform With Other Democrat Governors. “It’s a standard letter addressed to Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Speaker Pelosi and Minority Leader Boehner, telling them states ‘will only achieve the health care security and stability they need if we succeed in working together with the Congress and the President to achieve health care reform.’ But missing from the signatures at the bottom are six governors: Mike Beebe (AR), Jay Nixon (MO), Bev Perdue (NC), John Lynch (NH), Dave Freudenthal (WY) and Brad Henry (OK).” (“Six Dem Governors Hold Out On Health Care Letter,” TPMDC, 10/5/09)

GOV. DAVE FREUDENTHAL (D-WY):“Freudenthal Said Expanding Medicaid May Be A Quick Way To Get Coverage For The Uninsured, But It’s Far From The Most Cost- Effective Or Efficient.He added that any health-reform plans must include steps to hold down costs. ‘That’s why I think you find governors interested in cost savings, reform and wellness activities,’ Freudenthal said. … ‘You know, you only have so much money, and this is the basic math: If you have 47 million people who don’t have coverage in the country, and your goal is to get coverage for those people, you can’t come to us and say that it’s not going to cost society anything.’” (“Medicaid Expansion May Be Budget Buster,” Wyoming Tribune Eagle, 7/27/09)

GOV. BEV PERDUE (D-NC): “The Absolute Deal Breaker For Me As Governor Is A Federal Plan That Shifts Costs To The States.” “We are all hungry for a solution, but the absolute deal breaker for me as governor is a federal plan that shifts costs to the states.” (“Perdue: Don’t Give States The Bill,” [Raleigh, NC] News & Observer, 7/21/09)

GOV. ED RENDELL (D-PA): “I Don’t Think It’s An Accounting Trick, I Think It’s An Unfunded Mandate … We Just Don’t Have The Wherewithal To Absorb That Without Some New Revenue Source …” (CNBC’s “Squawk Box,” 9/3/09)

GOV. BILL RICHARDSON (D-NM):  “We Can’t Afford That, And That’s Not Acceptable.” (“Govs Resist Added Federal Expenses From Congress,” The Associated Press, 7/19/09)

GOV. CHRISTINE GREGOIRE (D-WA): “As A Governor, My Concern Is That If We Try To Cost-Shift To The States We’re Not Going To Be In A Position To Pick Up The Tab.” (“Governors Fear Medicaid Costs In Health Plan,” The New York Times, 7/20/09)

GOV. BILL RITTER (D-CO): “Our Only Point Was That A Significant Medicaid Expansion Should Not Operate As An Unfunded Mandate For The States.” (“Ritter Fears Federal Expenses May Hit Colorado,” The Denver Post, 7/20/09)

GOV. BRIAN SCHWEITZER (D-MT): “The Governors Are Concerned About Unfunded Mandates, Another Situation Where The Federal Government Says You Must Do X And You Must Pay For It. Well if they want to reform health care, they should figure out what the rules are and how they are going to pay for it.” (“Many Governors Against Health Care Bill, Label It Unfunded Mandate,” Fox News, 7/19/09)

GOV. JOE MANCHIN (D-WV): “They Thought The Best Way, The Federal Government Thought The Best Way Is By Expanding Medicaid To Make That Happen. But We Have Said, ‘Under No Conditions Can We Take Unfunded Mandates.’ You can’t raise the eligibility of Medicaid 133% and put a $100 billion back on the states to pick up.” (“Governor Manchin Joins Counterparts In Mississippi,” [West Virginia] Metro News, 7/20/09)

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In a recent interview with Charlie Rose, Speaker Pelosi not only hinted at a Value-Added Tax (VAT) to pay for health care “reform,” she practically endorsed the idea as a way to equalize tax treatment between the U.S. and Europe.

Pelosi stated, “Somewhere along the way, a value-added tax plays into this.  Of course, we want to take down the health care cost, that’s one part of it.  But in the scheme of things, I think it’s fair to look at a value-added tax as well.”

The implementation of a VAT would assuredly break President Obama’s pledge that no one making under $250,000 would see a tax increase of any kind.  A VAT is essentially a massive sales tax (over 20% in some countries) on all consumers.  What’s worse, a VAT is typically not transparent, that is, prices go up but consumers don’t see the tax when they’re at the checkout counter.

See below for Obama’s pledge.  Studies on the regressive and horrible idea of a VAT here and here.

Rarely does Congress ever get anything right.  Two weeks ago, the Senate Finance Committee decided to hold a vote on the Baucus Bill before the Congressional Budget Office (CBO) had a chance to put a price tag on the legislation.

Well, today the committee has decided that it should wait at least 24 hours before voting on the bill, in order to allow the CBO a chance to examine the legislation.  Most of the senators still haven’t read the entire monstrosity, but at least they’ll know the price tag.

It occurred to us yesterday that we should request the names and affiliations of the 150 doctors in white coats (some hastily provided by the White House costume department) who appeared at President Obama’s latest ObamaCare infomercial.

Then, as if by providence, The New York Times provided us with one sentence that told us all we really need to know about these people who are going to fan out across the countryside to sell, sell, sell: 

Many are members of Doctors for America, a new grass-roots organization that has advocated a health care overhaul and is an outgrowth of Doctors for Obama, which worked to help elect the president.”

Since the President said nothing new yesterday, we must assume that they’re going to sell the same old “hope and change” they were peddling before the election.  That isn’t medicine, and it surely isn’t how to pay for it.

Medicare, the Patron Saint of all that is right with government health care, generally has a positive image.  Despite its massive pending fiscal fallout looming in 2017, seniors are mostly satisfied with the program.  However, tales of Medicare’s greatness are vastly exaggerated.

Michael Moore, for example, made millions (thanks capitalism!) depicting insurance companies as villains denying coverage to the poor and sick.  Government health care, we are told, cares only about compassion and serving those loyal taxpayers who have forked over 12.4% of their salary during their lives to a bankrupt federal program.

Well, according to the American Medical Association (p.2), Medicare actually has the highest percentage of claims denied.  Yes, even the benevolent government-run system that so many liberals in Congress seek to emulate loves denying coverage to taxpayers and patients.

Per the AMA 2008 Nationl Health Insurer Report Card:  Medicare denied 6.85% of claims, compared to a 2.9% denial rate by Humana and a 2.68% denial rate by United Health Care.

The next time you hear someone proclaim the virtues of a public option, remind them that if Medicare is any example, our health care system is in for even more trouble.

Last week, CFIF ran a commentary piece discussing the budget-busting effects that an expansion of Medicaid, as called for in the health care reform bills making their way through Congress, will have on state budgets.

With many state budgets deep in the red and governors scrambling to find more places to cut due to the economic downturn, we warned:

The principal (but far from only) problem for the states [with health care reform] is forced expansion of Medicaid, a shared expense with the federal government, but already coming apart at the seams in many states, which must, on average, pay about 43 percent of Medicaid costs.”

Shailagh Murray of The Washington Post has a piece today with the sub-title “Governors Fear For Their Budgets” that addresses the issue, and which reads in part:

Whether Medicaid can absorb a huge influx of beneficiaries is a matter of grave concern to many governors, who have cut low-income health benefits — along with school funding, prison construction, state jobs and just about everything else — to cope with the most severe economic downturn in decades.”

The issue is getting some attention in Congress, particularly by Majority Leader Harry Reid who cut a sweetheart deal with Senate Finance Committee Chairman Max Baucus to, as Murray notes, “ensure that the federal government would pay the full cost of expanding Medicaid in Reid’s state, Nevada.” 

Some governors, notably Rick Perry (R-TX), Phil Bredesen (D-TN) and Mitch Daniels (R-IN), are already speaking out on this issue.  Is yours?

Over the weekend, I had the misfortune of shopping in the same grocery store with the Chairman of the Senate Finance Committee, Max Baucus.  Senator Baucus is currently front-and-center in the debate over health care reform, and the bill that passes through his committee could be the final version that the President signs.

This was regrettably my second encounter with the senior Senator from Montana.  The first was on a flight out of Minneapolis.  The Senator, not surprisingly, was seated in first class.

During the Senator’s shopping experience I passed him in the wine section.  Chairman Baucus, like many shoppers, was in the French wine section of the store.  As capitalists, we can all appreciate the value of choice.  Senator Baucus believes that French wine is the best value for the price and no one should stop him from making that choice.  “Buy American” means little to Senator Baucus, even though his voting record might indicate otherwise.

For example, even though the Senator prefers choice in his wine purchasing, last week he denied Senator Ron Wyden’s health care free choice amendment from coming up for a vote in committee.  Senator Wyden’s amendment would have allowed consumers to shop across state lines for cheaper insurance.  For Senator Baucus, “choice for wine: yes; choice for health care: no, unless you’re paying me to vote otherwise.”

In addition, although Senator Baucus prefers foreign wine, he evidently doesn’t like foreign sugar.  In 2005, Senator Baucus voted against the Central American Free Trade Agreement (CAFTA).  CAFTA would have normalized trade relations with the Dominican Republic and other Central American countries, driving down prices for American consumers.  Yet, Senator Baucus chose to vote with the sugar industry in his home state of Montana (sugar beets) and deny consumers a chance to purchase lower-priced foreign imports.

So, when it comes to choice and competition, Senator Baucus enjoys the freedom of the market in his personal life, but he’ll do his best in Congress to ensure that you don’t have it in your life.  That’s hypocrisy, pure and simple.

President Obama has frequently cited the Mayo Clinic as an example of excellent health care at affordable prices.  In July, Mayo criticized part of House “health care reform” plans.  Now, Mayo’s CEO, Dr. Denis A. Cortese, tells The New York Times that “he is disgusted with the way Washington is approaching an overhaul of the nation’s health care system.”

In an interview with Reed Abelson, Cortese said, “Look at all the time we’re wasting.  It’s pretty heartbreaking to watch.”

Abelson: 

Citing Medicare’s track record, Dr. Cortese said he would urge Congress to create a national package of health insurance options modeled after the Federal Employees Health Benefits plan.

“That program allows civil servants to choose from a wide range of insurance offerings, with dozens of health insurers participating.  If people want more generous coverage, they have to pay more.  The plans are vetted by the government, which also restricts the amount of profit the insurers can make on the basic policies.”

To read the brief article online, which is slightly different from the print version, go here.

Despite the Senate Finance Committee voting twice this week to reject a government-run public health insurance option, Senate Majority Leader Harry Reid said today on a phone call with constituents:

We are going to have a public option before this bill goes to the president’s desk.”

This, according to the Las Vegas Review-Journal.

In this week’s Freedom Minute, CFIF’s Renee Giachino discusses the massive tax hike on life-saving medical devices that Senate Democrats wish to pass as part of health care reform legislation.

When we posted commentary this morning regarding the imposition of ginormous new Medicaid mandates on the states if “health care reform” passes, we briefly alluded to Senate Majority Leader Harry Reid, in an attempt to ease his dismal re-election chances, getting 100% reimbursement for Nevada, while sticking other states with their share and part of his also.

Our point was to motivate governors (who well understand the problem) to oppose this travesty.

Manu Raju of politico.com wrote on another aspect of Reid’s sweetheart deal – the grumbling of other Senate Democrats – and the piece is priceless.

Note how the other Democrats oh so seriously want their states to be treated “fairly,” not once acknowledging that they are about to screw all of them, in varying degrees.

Note how Reid uses the argument to make his campaign speech to Nevadans, which seems to say, “I’m going to pass this bill that screws you, but less than others.  Don’t you want to keep me?”

Note how none of these worthies recognize how ridiculous they sound.

No one knows our health care system better than doctors.  Thankfully, there are several in Congress, including Senator Tom Coburn (R-OK), who understand that a government-run system would lead to rationing and a lower quality of care.

Here is a clip from one of the recent “Senate Doctors Show.”

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The common refrain in the Senate is that a bill needs 60 votes (3/5 of the Senate) to pass.   Otherwise, a dedicated cadre of 41 Senators can continue debate on a bill forever, thus killing its legislative prospects.

However, during a process known as budget reconciliation, the Senate is allowed to pass legislation directly related to taxing and spending with only a majority (51 votes) needed.  Thus, as Harry Reid has already pledged, a government-takeover of health care could pass, even with unanimous GOP objection and with several Democratic defectors.

Opponents of a government takeover do have several arrows in their quiver.  Under the “Byrd Rule,” a Senator can make a budget point of order and rule that a certain piece of legislation is not germane to the budget reconciliation process.  It takes 60 votes to overcome a budget point of order.  Thus, any health care bill passed during the reconciliation process would likely emerge from the Senate as a smelly piece of Swiss Cheese, not pie-in-the-sky universal health care.

In case you wanted to know more, MSNBC’s First Read has a great primer on reconciliation.

It’s happened again.  Rep. Alan Grayson (D-FL) electrified the House floor last night with one of those stunning arguments for which Members of Congress are becoming unchallenged public intellectuals.  It can be summed up by his visual aid:  “The Republican Health Care Plan:  Die Quickly.”

Wouldn’t the country be better off if Jeff Probst (host of “Survivor” for those of you who only watch C-Span) were to become House Speaker?  He’d introduce better production values, reality-show suspense and, most important in a culture that resists the significant public value – not to mention entertainment – of throwing people to lions, weekly banishment from the island.

Properly medicated readers might wish to read “Grayson’s greatest hits” compiled by Josh Kraushaar at Politico.com.

This time, the committee voted against the “moderate” Schumer version of the public option.  The vote was 10-13, with Senators Baucus (MT), Lincoln (AR), and Conrad (ND) voting against government-run health care.

This looks like the death knell of the public option in the Senate, as Senator Schumer and Chairman Baucus both admit that a bill with a public option has no chance of passing the Senate with 60 votes.  However, there are some reports that Senate Democrats might use the budget reconciliation process to push through a public option, requiring only 50 votes.

Call your Senators and tell them to vote “No” on a government-run public option that would result in anywhere from 80-120 million Americans losing their insurance.  Here is the number: 202-224-3121.